After the acquisition: 3 startup founders share their exit experiences
In an interview at TechCrunch Disrupt in 2014, then-CEO of Pure Storage, Scott Dietzen, was asked about the possibility of exiting via acquisition.
He didn’t pull any punches: “Acquisitions always suck, and suck worse than you think that they are going to suck.”
If being acquired means losing the brand and identity you have worked so hard to build — or perhaps worse, losing your cultural identity — it probably will suck. If you get stuck with a company that simply imposes its will on you, it definitely will.
Sometimes, in spite of Dietzen’s proclamation, it can be at least OK, and both sides get something out of the deal: the acquiring company needs your product or your talent, you receive an exit and a check.
Previously, we spoke to the acquiring companies to get their perspective on the deal and how they fold these companies into the larger entity. Now, we’ll hear from executives who worked at three companies that they bought.
These companies said their acquisition experience was just fine, thank you very much. Though they aren’t about to talk crap about their new overlords, you do get the sense that they landed in a pretty decent spot, all things considered.
Deciding to sell
The companies we selected are not fresh startups by any means. One was owned by a private equity firm, and one was owned by another company when they were sold, so they had been around the block and knew what it was like to report to someone else. The last company, a 72-year-old operation, was the exception.
Will Conway, CEO of Pathwire, had been down this path before. His startup was a member of the YC Winter 2011 cohort, and was sold to Rackspace a year later. Private equity firm Thoma Bravo picked it up a while later and sold it to Sinch last year for $1.9 billion.
As part of a private equity firm, Conway didn’t have a lot of input when it came to being sold. If the firm was going to sell, it was going to sell, but as Conway sees it, he landed with as good a company as he could have hoped for. Pathwire’s primary products, Mailgun and Mailjet, gave Sinch a missing email marketing piece, and fit nicely into the company’s platform of communications services.